Govt stipulates 3 year lock in period for Hind Copper bidders

NEW DELHI: The Disinvestment Ministry has stipulated a three year lock in period for prospective bidders vying for stake in Hindustan Copper where the government proposes to shed its entire equity.
The move assumes importance in the light of the controversy over the Centaur Hotel deal where the original owners Batra group had re-sold the property to Sahara group for a profit.
Official sources said the decision to impose a lock-in clause was needed as the company was engaged in mining of copper employing over 6,500 people.
They said that idea behind the sale was to enable the company to grow while preserving employment therefore a clause to this effect was needed.
The government currently holds 98 per cent stake in the copper major while the balance is held by public. It proposes to offload its entire equity to strategic partner along with management control. A F Ferguson have been mandated as global advisors for the deal.
Last month the Core Group of Secretaries (CGD) had approved a proposal to freeze the transaction documents for the sale of the company. The documents would now be taken to Cabinet Committee on Disinvestment for finalisation prior to calling of financial bids.
Last year an earlier attempt at privatising the company had failed owing to a lukewarm response from bidders citing the poor financial health of the company.
The government had agreed to a round of restructuring in the form of Rs 440 crore package which involved amongst other things an extension of the guarantee against loans raised from IDBI and further funding for a separation scheme.
Despite this bidders were not enthused and had again approached the Government for a further Rs 500 crore package.
The copper major has been incurring losses over the past few years owing to glut in copper prices on the London Metals Exchange.